Complaining that ad budgets have tightened by "hundreds of millions of dollars," and as part of its turnaround plan, now in year two, AOL is going to cut over 10% of its staff, about 700 people, skip pay raises this year and consolidate facilities in an attempt to contain costs. Most of the job losses will be in the US and most will be out by March.

The internal memo CEO Randy Falco circulated by way of explanation puts question marks around AOL's international operations.

Falco identifies the company's core business as Platform A-based advertising, MediaGlow publishing and People Networks social media. It's still trying to get out of its hereditary Internet access business.

AOL was also supposed to be trying to sell itself to Yahoo - at least before Carol Bartz got to Yahoo a few days ago.